Amahl S. Azwar, Jakarta – The consumption of subsidized fuels is expected to supersede twice this year the quotas set in the 2012 state budget after the House of Representatives approved the government's request for a revision in September following a spike in demand.
According to figures issued by state oil and gas producer PT Pertamina, the consumption of subsidized fuels as of Nov. 24 had reached 25.2 million kiloliters for Premium and 12.9 million kiloliters for diesel.
The official state budget quotas for the fuels are set at 27.8 million kiloliters and 15 million kiloliters, respectively, up by 15 percent and 8 percent prior to the revision.
Both types of transportation fuels are currently sold for Rp 4,500 (49 US cents) per liter, half the price of non-subsidized fuel and the cheapest in Southeast Asia.
"We have estimated that by the end of 2012, if there is no policy from the government to control consumption, real consumption is likely to surpass the quotas by 450,000 kiloliters for Premium and 800,000 kiloliters for diesel," Pertamina spokesman Hanung said in a press briefing.
Pertamina plans to use its backup reserves to continue distributing the subsidized fuels even after it has surpassed the quotas, which means the company would likely spend an additional Rp 6 trillion from its budget.
With its daily distribution of subsidized fuels normally reaching 80,000 kiloliters of Premium and 42,900 kiloliters of diesel per day, Pertamina expects the quotas to run out in mid-December. "In Jakarta, for example, supplies of subsidized Premium as stipulated in the quota are likely to end on Dec. 19," said Hanung.
In a bid to ensure that subsidized fuel consumption does not surpass the quotas, downstream oil and gas regulator BPH Migas has ordered Pertamina to limit its daily fuel distribution to each city, starting on Nov. 19.
However, the company decided on Monday to end the policy due to the potential for social unrest in cities such as Bengkulu, Lampung, Palangkaraya, Palembang, Pontianak and Surabaya, where consumption is expected to breach designated quotas in the near future.
"In Kutai Barat, East Kalimantan, there has been a series of social conflicts due to the scarcity of subsidized fuel. That is why we retracted the plan," said Hanung.
Despite this, Hanung confirmed that Pertamina, in accordance with BPH Migas instructions, would limit the opening hours of gas stations from 6 a.m. to 6 p.m. in Bali, Balikpapan, Batam, Java, Makassar, Medan and Palembang on Dec. 2 to celebrate its so-called National Day of Awareness of Subsidized Fuel Consumption.
The Finance Ministry has predicted that energy subsidy realization in 2012 might exceed its original allocation by at least Rp 103 trillion to reach Rp 305 trillion.